July 27, 2024
Bitget and crypto influencer embroiled in legal saga after Reel Star token listing fiasco
Bitget and crypto influencer embroiled in legal saga after Reel Star token listing fiasco

Update (August 18, 2:09 PM UTC): This article has been updated to include the views of both parties and additional information. Both sides are expected to make further comments.

Cryptocurrency influencer Evan Luthra has filed a lawsuit against cryptocurrency exchange Bitget for freezing his account following the listing of new tokens in March.According to Luthra, exchanges pause He withdrew and froze $200,000 in Tether (USDT), while attempts for clarification went unanswered.

Luthra’s involvement in the Reel Star project is the background to these events. The influencer was hired as an advisor to Reel Star, a startup developing a social media app for creators. As compensation, Luthra received Reel Tokens (REELT), the project’s utility token. After listing, the influencer sold 1.3 million RELT tokens on Bitget. Luthera’s account was subsequently frozen on suspicion of market manipulation. Regarding the decision, a spokesperson for Bitget told Cointelegraph:

“Bitget faced a manipulation attack by a group of traders trying to profit by manipulating trading on the exchange. Their target was a new coin called RELT, which they attempted to dump immediately after Bitget’s listing, leading to the Coin prices fell sharply.

Additionally, Bitget claims to have contacted the cryptocurrency influencer for an explanation: “In response, he admitted to selling tokens. However, when we asked about the reasons behind this unusual behavior, we did not receive positive feedback or a satisfactory answer.”

Luthra claimed his innocence, citing claims that Reel Star co-founder Navdeep Sharma allegedly approved of his token sale plans. The influencer is now seeking a hefty $16 million in damages, as well as $200,000 held in his account. His lawsuit involves Bitget, Foresight Ventures and key executives.

“Bitget prevented me, a user of a fully KYCed (know your customer) platform, from withdrawing my tokens,” Luthra told Cointelegraph, adding:

“After I sold this portion of the allocated tokens, my funds – including the cryptocurrencies I already owned on the exchange prior to REELT (…) – were blocked, and the company stole my tokens themselves the value of.”

Gracy Chen, managing director of Bitget, said the exchange had previously Announce The case was investigated, and the findings were announced weeks later, with a compensation plan in place for more than 500 clients using the company’s own funds and frozen transaction funds.

“At Bitget, user protection is our top priority. When we discover any illegal or fraudulent behavior on our platform, we will take immediate action.” The firm has not yet received notice of the lawsuit.

In response to Chen’s question, Luthra noted that he was just a “regular user who received tokens as compensation for consulting” and should not be considered part of the project team.

In a blog post, Bitget release Responding to the incident, it said it communicated with Lusla shortly after the incident. The exchange explained the reasoning behind its action: “After our investigation, we believe that the mentioned account is involved in suspicious trading behavior on Bitget.”

Excerpt from Bitget blog post. Source: Bitget

On X (formerly known as Twitter), members of the crypto community expressed mixed reactions to the lawsuit.Although some of Loutra’s supporters Observed The case exposed common problems faced by users of centralized cryptocurrency exchanges, but not others, explain Bitget acted correctly and protected users.

Several prominent figures in the cryptocurrency community have weighed in on the matter, including Binance CEO Changpeng Zhao.

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